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> I dont think anyone has ever yet explained how this is meant to function as a currency. Because it can't. Even assuming everyone is on board with blockchains

by qsort 5y ago

> I dont think anyone has ever yet explained how this is meant to function as a currency. Because it can't. Even assuming everyone is on board with blockchains, removing the ability of the central bank to increase the monetary supply during recessions makes every downturn 10x worse. (as unpopular as it may be with inflation this high right now)

mjburgess 5y ago
There's one revealing way a bitcoin-economy could release money, right? Ask all the major holders of coins. Hmm... wait a minute, a small few holders of coins... can behave like a CENTRAL BANK ... ?! I wonder what those few major holders think about crypto... ah yes, that it will free us all...
- unmole 5y ago
  > Hmm... wait a minute, a small few holders of coins... can behave like a CENTRAL BANK ... ?! Before the constitution of the Federal Reserve, J.P. Morgan acted like a central bank by being the lender of last resort.
  - mjburgess 5y ago
    Sure, and how would that work with early-stakers? They'd form a guild, much like a large bank, and control large parts of the currency. Now, taking crypto people at their word, they dont want the gov to regulate that. So what does this mean? We have a tiny feudal guild with control over the economy. A central bank, with an inflationary currency, heavily regulated by the gov is nothing like this group of wannabe feudal lords. By comparison, modern central banking is vastly more democratic, and ran for the benefit of soceity.
    - unmole 5y ago
      > Now, taking crypto people at their word That is unlikely to end well.
- miracle2k 5y ago
  If that is supposed to imply that the major coin holders can change the monetary policy to increase the supply, because their holdings give them power over the network, then no - it doesn't, and they can't.
jonathan-adly 5y ago
The numbers don't support this by the way. Obviously, Austrian Economists have all kind of literature debunking this (Bitcoin Standard first 6 chapters is a good summary) - but put this aside for a second, even some of the Keynesian/monetarist economists have wrote about the unintended consequences of state intervention in the monetary supply. The ELI5 version is basically by implicitly telling everyone that JP Morgan would never be allowed to fail, then you are skewing free market risk/reward decisions and skewing money/resources toward too big to fail monopolies.
- tablespoon 5y ago
  > Austrian Economists have all kind of literature debunking this Given what I know about Austrian Economics, "debunk" is most likely too strong of a word here.
  - jonathan-adly 5y ago
    https://en.wikipedia.org/wiki/Friedrich_Hayek https://en.wikipedia.org/wiki/Friedrich_Hayek
    - tablespoon 5y ago
      I am aware of Friedrich Hayek. My comment still stands.
- lottin 5y ago
  Austrian Economics is not a source of scientific truth, since Austrian economists openly reject the scientific method.
  - disruptalot 5y ago
    Is there anything really inherent in Austrian economics about ignoring evidence? Hate to be that guy (source???), but this doesn't match up at all with my impression of the difference factions in economics. If anything, the economists who reject the current dominant economic tools seem to have more of an emphasis on empirical evidence than wishful thinking.
miracle2k 5y ago
> Because it can't. Even assuming everyone is on board with blockchains, removing the ability of the central bank to increase the monetary supply during recessions makes every downturn 10x worse. That doesn't mean it can't function as a currency, just that it maybe isn't a good one. This is an important distinction, because critics have adopted this talking point of "not a currency" or "can't be a currency" as some kind of binary, but then have terrible arguments backing this up. The difference between 2% inflation and 0% inflation is just that - 2%. Mind you - Bitcoin is currently issuing at a rate of 1.5%. The reason it is volatile has absolutely nothing to do with it's "deflationary" nature.
- qsort 5y ago
  > That doesn't mean it can't function as a currency, just that it maybe isn't a good one. Yeah I mean, given a sufficiently retarded government anything can function as currency, when we say "X can't be Y" we usually mean "X can't function as a Y properly" > The difference between 2% inflation and 0% inflation is just that - 2%. The point is that normal fiat currencies can be regulated by their central bank, the difference between 2% inflation and 0% inflation during a recession could be the difference between a manageable downturn and riots in the streets. That's an extreme example and often not the case, but why would you deprive yourself of the lever of money supply? There's a reason we're not on the gold standard anymore. > Bitcoin is currently issuing at a rate of 1.5%. The reason it is volatile has absolutely nothing to do with it's "deflationary" nature. Which makes it deflationary by definition if the economy is growing at more than 1.5%/yr in real terms.

by qsort 5y ago

mjburgess 5y ago

There's one revealing way a bitcoin-economy could release money, right? Ask all the major holders of coins. Hmm... wait a minute, a small few holders of coins... can behave like a CENTRAL BANK ... ?! I wonder what those few major holders think about crypto... ah yes, that it will free us all...

unmole 5y ago
> Hmm... wait a minute, a small few holders of coins... can behave like a CENTRAL BANK ... ?! Before the constitution of the Federal Reserve, J.P. Morgan acted like a central bank by being the lender of last resort.
- mjburgess 5y ago
  Sure, and how would that work with early-stakers? They'd form a guild, much like a large bank, and control large parts of the currency. Now, taking crypto people at their word, they dont want the gov to regulate that. So what does this mean? We have a tiny feudal guild with control over the economy. A central bank, with an inflationary currency, heavily regulated by the gov is nothing like this group of wannabe feudal lords. By comparison, modern central banking is vastly more democratic, and ran for the benefit of soceity.
  - unmole 5y ago
    > Now, taking crypto people at their word That is unlikely to end well.
miracle2k 5y ago
If that is supposed to imply that the major coin holders can change the monetary policy to increase the supply, because their holdings give them power over the network, then no - it doesn't, and they can't.

jonathan-adly 5y ago

The numbers don't support this by the way. Obviously, Austrian Economists have all kind of literature debunking this (Bitcoin Standard first 6 chapters is a good summary) - but put this aside for a second, even some of the Keynesian/monetarist economists have wrote about the unintended consequences of state intervention in the monetary supply. The ELI5 version is basically by implicitly telling everyone that JP Morgan would never be allowed to fail, then you are skewing free market risk/reward decisions and skewing money/resources toward too big to fail monopolies.

tablespoon 5y ago
> Austrian Economists have all kind of literature debunking this Given what I know about Austrian Economics, "debunk" is most likely too strong of a word here.
- jonathan-adly 5y ago
  https://en.wikipedia.org/wiki/Friedrich_Hayek https://en.wikipedia.org/wiki/Friedrich_Hayek
  - tablespoon 5y ago
    I am aware of Friedrich Hayek. My comment still stands.
lottin 5y ago
Austrian Economics is not a source of scientific truth, since Austrian economists openly reject the scientific method.
- disruptalot 5y ago
  Is there anything really inherent in Austrian economics about ignoring evidence? Hate to be that guy (source???), but this doesn't match up at all with my impression of the difference factions in economics. If anything, the economists who reject the current dominant economic tools seem to have more of an emphasis on empirical evidence than wishful thinking.

miracle2k 5y ago

> Because it can't. Even assuming everyone is on board with blockchains, removing the ability of the central bank to increase the monetary supply during recessions makes every downturn 10x worse. That doesn't mean it can't function as a currency, just that it maybe isn't a good one. This is an important distinction, because critics have adopted this talking point of "not a currency" or "can't be a currency" as some kind of binary, but then have terrible arguments backing this up. The difference between 2% inflation and 0% inflation is just that - 2%. Mind you - Bitcoin is currently issuing at a rate of 1.5%. The reason it is volatile has absolutely nothing to do with it's "deflationary" nature.

qsort 5y ago
> That doesn't mean it can't function as a currency, just that it maybe isn't a good one. Yeah I mean, given a sufficiently retarded government anything can function as currency, when we say "X can't be Y" we usually mean "X can't function as a Y properly" > The difference between 2% inflation and 0% inflation is just that - 2%. The point is that normal fiat currencies can be regulated by their central bank, the difference between 2% inflation and 0% inflation during a recession could be the difference between a manageable downturn and riots in the streets. That's an extreme example and often not the case, but why would you deprive yourself of the lever of money supply? There's a reason we're not on the gold standard anymore. > Bitcoin is currently issuing at a rate of 1.5%. The reason it is volatile has absolutely nothing to do with it's "deflationary" nature. Which makes it deflationary by definition if the economy is growing at more than 1.5%/yr in real terms.